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Forex Today: Cautious optimism persists ahead of UK data dump, German ZEW

Dhwani Mehta FXStreet

The market mood was cautiously optimistic in Asia on Tuesday, as the optimism over a likely United States-Mexico-Canada Agreement (USMCA) and upbeat China’s inflation data was somewhat negated by the looming US tariffs hike and negative US-Sino trade headlines. The Chinese news outlet, Global Times said the downtrend in bilateral trade will be difficult to reverse even though a Phase One deal is reached.

Across the fx space, the US dollar steadied vs. its main competitors, allowing most majors to post small gains. The Kiwi emerged as the strongest, up +0.20% above the 0.6550 level following upbeat Chinese data while the Aussie also benefited from stabilizing the Australian NAB Business Survey and the iron-ore price surge, with 0.6840 tested. The USD/JPY pair bounced off support near 108.50 amid positive S&P 500 futures but the uptick was limited by declines in the Asian equities and Treasury yields. The Canadian dollar ticked higher against the greenback on USMCA optimism, with USD/CAD downed nearly 20-pips to near 1.3225.

Amongst the European currencies, both EUR/USD and GBP/USD traded better bid, with Cable looking to revisit eight-month highs of 1.3180 ahead of the UK GDP and Industrial Output data.

On the commodities front, both crude benchmarks trade modestly flat amid trade and growth worries, as traders await the weekly Crude Stocks data. Meanwhile, gold prices extended the side trend around 1460, in search of a clear direction.

Main Topics in Asia

China's trade surplus narrowed to $38.73 billion in November amid sharp drop in exports

China's exports to US dropped 23% in November

UK election polls: Tories maintain lead over Labour into final days

Beijing orders state offices to replace foreign PCs and software – FT

Mexican Foreign Minister: Mexico will not accept US labour inspections in USMCA trade pact

Japanese GDP Q3 beats expectations by 0.2%

Big FX platforms see e-trading volumes drop over past three years - BIS

S. Korea's Vice FinMin: Will act swiftly if volatility in financial market rises

Governor of China's Xinjiang expresses strong condemnation of US bill

Sources: US, Canada and Mexico are edging closer to USMCA trade deal - WSJ

Moody's: 2020 outlook for APAC banks is negative

PBOC Adviser Liu: China's potential growth below 6% over next five years

Key Focus Ahead

The immediate focus is not the UK data flow, including the monthly GDP print, Trade Balance, Industrial and Manufacturing Production, which will release at 0930 GMT. Next of note remains the German and Eurozone ZEW Business Survey, due at 1000 GMT. Besides the macro news, the UK political drama and trade-related headlines will continue to influence the market.

In the NA session, a few minority reports from the US docket will drop in but the American Petroleum Institute’s (API) weekly US Crude Stockpiles data, due at 2130 GMT, will grab some attention from oil and CAD traders. Also, fresh updates on the USMCA trade deal will be closely eyed.

EUR/USD: Struggling despite impending bull cross, focus on German ZEW

EUR/USD is struggling to find bids despite an impending bull cross of key averages. The odds appear stacked in favor of a bearish move. A big beat on German ZEW number is needed to mitigate bearish pressures.

GBP/USD nears multi-month top ahead of UK data dump, election drama continues

GBP/USD remains mildly bid around 1.3150 ahead of the London open. The pair surged to April month high on Monday but the languishing lead of the ruling Conservatives over the opposition Labour Party capped the upside. Focus on UK growth and industrial figures.

USD Holds Support Ahead Of FOMC

It’s a mixed regarding USD performance overall, yet DXY points towards a near-term trough which could see a lower Euro and higher USD/JPY (at least over the near-term).

UK Election Preview: GBP bulls to hold their horses

UK elections are critical for sterling traders this week, held on 12th Dec and results in for the morning of 13th Dec. Market euphoria could see GBP push higher across the board on a Tory victory.

GMT	Event	Actual	Consensus	Previous
Sunday, Dec 08
24h	ARS Immaculate Conception
Tuesday, Dec 10
00:30	AUD House Price Index (QoQ)	2.4%	0.2%	-0.7%
00:30	AUD House Price Index (YoY)	-3.7%		-7.4%
00:30	AUD Mid-Year Economic and Fiscal Outlook
01:30	CNY Consumer Price Index (MoM)	0.4%	0.1%	0.9%
01:30	CNY Producer Price Index (YoY)	-1.4%	-1.5%	-1.6%
01:30	CNY Consumer Price Index (YoY)	4.5%	4.2%	3.8%
02:45	AUD RBA's Bullock speech
03:00	IDR Retail Sales (YoY)	3.6%		0.7%
05:30	EUR Manufacturing Output (MoM)	0.1%		1.6% Revised from 1.7%
06:00	EUR Industrial Output (MoM)			-1.2%
06:00	JPY Machine Tool Orders (YoY)			-37.4%
06:30	EUR Nonfarm Payrolls (QoQ)		0.3%	0.3%
07:00	DKK Consumer Price Index (YoY)		0.7%	0.6%
07:00	DKK Inflation (HICP) (YoY)			0.6%
07:00	EUR Trade Balance			€-0.21B
07:00	RON Trade Balance			€-1.189B
07:00	NOK Core Inflation (MoM)		0.1%	0.0%
07:00	NOK Consumer Price Index (MoM)		0.2%	0.2%
07:00	NOK Consumer Price Index (YoY)		1.6%	1.8%
07:00	NOK Core Inflation (YoY)			2.2%
07:00	NOK Producer Price Index (YoY)			-13.8%
07:45	EUR Industrial Output (MoM)		0.2%	0.3%
08:00	HUF Consumer Price Index (YoY)		3.3%	2.9%
08:00	HUF Core Consumer Price Index (YoY)		4%	4%
08:00	CZK Consumer Price Index (YoY)		2.9%	2.7%
08:00	CZK Consumer Price Index (MoM)		0.1%	0.5%
08:00	EUR Industrial Output (YoY)		-1.0%	-2.5%
09:00	EUR Industrial Output w.d.a (YoY)		-2.1%	-2.1%
09:00	EUR Industrial Output s.a. (MoM)		-0.2%	-0.4%
09:30	GBP Industrial Production (YoY)		-1.2%	-1.4%
09:30	GBP Manufacturing Production (MoM)		0.0%	-0.4%
09:30	GBP Industrial Production (MoM)		0.2%	-0.3%
09:30	GBP Manufacturing Production (YoY)		-1.4%	-1.8%
09:30	GBP Index of Services (3M/3M)		0.5%	0.4%
09:30	GBP Trade Balance; non-EU		£-3.500B	£-4.032B
09:30	GBP Goods Trade Balance		£-11.650B	£-12.541B
09:30	GBP Total Trade Balance			£-3.36B
09:30	GBP Gross Domestic Product (MoM)		0.1%	-0.1%
n/a	EUR 3-Month Letras Auction			-0.602%
n/a	EUR 9-Month Letras Auction			-0.489%
10:00	EUR ZEW Survey - Economic Sentiment		0.0	-2.1
10:00	EUR ZEW Survey - Current Situation		-22.3	-24.7
10:00	EUR Industrial Production (YoY)			1.2%
10:00	EUR Consumer Price Index - Harmonized (YoY)			-0.3%
10:00	EUR Consumer Price Index (YoY)		-0.3%	-0.7%
10:00	EUR ZEW Survey - Economic Sentiment		-17.7	-1.0
11:00	USD NFIB Business Optimism Index		102.8	102.4
11:00	ZAR Manufacturing Production Index (YoY)		-2.7%	-2.4%
11:00	EUR Global Trade Balance			€-5.282B
12:00	INR Trade Deficit Government			$11.01B
13:30	USD Nonfarm Productivity		-0.1%	-0.3%
13:30	USD Unit Labor Costs		3.3%	3.6%
13:55	USD Redbook Index (YoY)			7.9%
13:55	USD Redbook Index (MoM)			0.4%
n/a	GBP NIESR GDP Estimate (3M)		-0.1%	0.1%
17:00	USD USDA WASDE Report
18:00	USD 10-Year Note Auction			1.809%
21:30	USD API Weekly Crude Oil Stock			-3.72M
21:45	NZD Electronic Card Retail Sales (MoM)		0.5%	-0.6%
21:45	NZD Electronic Card Retail Sales (YoY)		1.5%	1.6%
23:00	KRW Unemployment Rate		3.6%	3.5%
23:30	AUD Westpac Consumer Confidence		-0.7%	4.5%
23:50	JPY Producer Price Index (YoY)		0.0%	-0.4%
23:50	JPY Producer Price Index (MoM)		0.1%	1.1%
23:50	JPY BSI Large Manufacturing Conditions Index (QoQ)		4.5	-0.2
Wednesday, Dec 11
n/a	CNY M2 Money Supply (YoY)		8.3%	8.4%
n/a	CNY New Loans		1,200.0B	661.3B
n/a	CNY FDI - Foreign Direct Investment (YTD) (YoY)			6.6%
03:00	KRW Money Supply Growth		7.5%	7.2%
07:00	TRY Current Account Balance		$2.000B	$2.477B
07:00	RON Consumer Price Index		3.7%	3.4%
08:00	ZAR Consumer Price Index (YoY)		3.6%	3.7%
08:00	ZAR Consumer Price Index (MoM)		0.1%	0.0%
08:30	SEK Consumer Price Index (MoM)		0%	0%
08:30	SEK Consumer Price Index (YoY)		1.7%	1.6%
08:55	ISK CBI Interest Rate Decision			3%
09:00	EUR Unemployment Rate (QoQ)			16.9%
11:00	BRL Retail Sales (MoM)		1.9%	1.2%
11:00	ZAR Retail Sales (YoY)		0.6%	0.2%
11:00	EUR Consumer Price Index (YoY)			0.3%
11:00	EUR Consumer Price Index (MoM)			-0.1%
11:00	ILS Trade Balance			$-2,510.2M
11:00	ILS Exports			$3,609.3M
11:00	ILS Imports			$6,119.5M
12:00	USD MBA Mortgage Applications			-9.2%
13:00	RUB Budget Fulfilment			3.5%
13:30	USD Consumer Price Index Core s.a			265.011
13:30	USD Consumer Price Index (MoM)		0.2%	0.4%
13:30	USD Consumer Price Index ex Food & Energy (YoY)		2.3%	2.3%
13:30	USD Consumer Price Index ex Food & Energy (MoM)		0.2%	0.2%
13:30	USD Consumer Price Index (YoY)		2.0%	1.8%
13:30	USD Consumer Price Index n.s.a (MoM)		257.221	257.346
13:30	CAD Capacity Utilization		82.1%	83.3%
15:30	USD EIA Crude Oil Stocks Change		-3.188M	-4.856M
19:00	USD FOMC Economic Projections
19:00	USD Monthly Budget Statement		$-196.5B	$-134.0B
19:00	USD Fed's Monetary Policy Statement
19:00	USD Fed Interest Rate Decision		1.75%	1.75%
19:30	USD FOMC Press Conference
20:00	BRL Interest Rate Decision			5%
n/a	NZD REINZ House Price Index (MoM)			1.1%
21:45	NZD Food Price Index (MoM)		-0.1%	-0.3%
21:45	NZD Visitor Arrivals (YoY)		0.4%	1.4%
23:50	JPY Foreign Bond Investment			¥-511.1B
23:50	JPY Foreign Investment in Japan Stocks			¥394B
23:50	JPY Machinery Orders (MoM)		0.9%	-2.9%
23:50	JPY Machinery Orders (YoY)		-1.8%	5.1%
Thursday, Dec 12
24h	GBP Parliamentary Election
24h	EUR European Council Meeting
00:00	AUD Consumer Inflation Expectations		3.5%	4.0%
00:01	GBP RICS Housing Price Balance		-5%	-5%
00:30	AUD RBA Bulletin
01:00	NZD ANZ Monthly Inflation Gauge (MoM)			0.2%
01:00	NZD ANZ Monthly Inflation Gauge (YoY)			3.1%
01:30	JPY BoJ's Amamiya speech
02:30	SGD Unemployment rate			2.3%
24h	MXN Day of the Virgin of Guadalupe
06:45	CHF SECO Economic Forecasts
07:00	EUR Consumer Price Index (YoY)		1.1%	1.1%
07:00	EUR Harmonized Index of Consumer Prices (MoM)		-0.8%	-0.8%
07:00	EUR Consumer Price Index (MoM)		-0.8%	-0.8%
07:00	EUR Harmonized Index of Consumer Prices (YoY)		1.2%	1.2%
07:00	RON Industrial Production (MoM)			1.9%
07:30	CHF Producer and Import Prices (YoY)		-2.2%	-2.4%
07:30	CHF Producer and Import Prices (MoM)		-0.1%	-0.2%
07:45	EUR Consumer Price Index (EU norm) (MoM)		0.1%	0.1%
07:45	EUR Consumer Price Index (EU norm) (YoY)		1.2%	1.2%
07:45	EUR Inflation ex-tobacco (MoM)			0%
08:00	PHP BSP Interest rate decision			4
08:00	HUF Industrial Output (YoY)			6.1%
08:30	CHF SNB Interest Rate Decision			-0.75%
08:30	CHF SNB Monetary Policy Assessment
08:30	CHF SNB Press Conference
08:30	SEK Unemployment Rate		6.3%	6.0%
09:30	ZAR Producer Price Index (YoY)		2.8%	3.0%
09:30	ZAR Producer Price Index (MoM)		0.2%	0.3%
n/a	EUR 10-y Obligaciones Auction			0.438%
n/a	EUR 3-y Bond Auction			-0.447%
n/a	EUR 5-y Bond Auction			-0.085%
10:00	EUR Industrial Production w.d.a. (YoY)		-2.3%	-1.7%
10:00	EUR Industrial Production s.a. (MoM)		-0.5%	0.1%
11:00	TRY CBRT Interest Rate Decision		12.5%	14.0%
11:00	EUR Consumer Price Index (YoY)			0.7%
11:00	EUR Consumer Price Index (MoM)			-0.3%
11:00	EUR HICP (MoM)			-0.2%
11:00	EUR HICP (YoY)			0.6%
12:00	MXN Industrial Output (YoY)			-1.8%
12:00	MXN Industrial Output (MoM)			0%
12:00	INR Manufacturing Output			-3.9%
12:00	INR Industrial Output		-2.0%	-4.3%
12:00	INR Cumulative Industrial Output			1.3%
12:45	EUR ECB Deposit Rate Decision		-0.5%	-0.5%
12:45	EUR ECB Interest Rate Decision		0%	0%
13:00	RUB Foreign Trade		$14.000B	$14.148B
13:00	RUB Central Bank Reserves $			$542.2B
13:30	USD Producer Price Index (YoY)		1.2%	1.1%
13:30	USD Producer Price Index ex Food & Energy (YoY)		1.6%	1.6%
13:30	USD Producer Price Index ex Food & Energy (MoM)		0.2%	0.3%
13:30	USD Producer Price Index (MoM)		0.2%	0.4%
13:30	USD Initial Jobless Claims		213K	203K
13:30	USD Initial Jobless Claims 4-week average			217.75K
13:30	USD Continuing Jobless Claims		1.678M	1.693M
13:30	EUR ECB Monetary Policy Statement and Press Conference
15:30	USD EIA Natural Gas Storage Change			-19B
16:30	USD 4-Week Bill Auction			1.5%
17:45	CAD BoC's Governor Poloz speech
18:00	USD 30-Year Bond Auction			1.53%
19:00	ARS Consumer Price Index (MoM)			3.2%
21:30	NZD Business NZ PMI			52.6
22:00	KRW Export Price Growth (YoY)			-7.3%
22:00	KRW Import Price Growth (YoY)			-5.7%
22:00	NZD Westpac Consumer Survey			103.1
23:50	JPY Tankan Large Manufacturing Outlook		3	2
23:50	JPY Tankan Non - Manufacturing Outlook		16	15
23:50	JPY Tankan Large Manufacturing Index		2	5
23:50	JPY Tankan Large All Industry Capex		6.0%	6.6%
23:50	JPY Tankan Non - Manufacturing Index		16	21
Friday, Dec 13
24h	EUR European Council Meeting
03:00	KRW Trade Balance			$3.37B
04:30	JPY Industrial Production (MoM)			-4.2%
04:30	JPY Industrial Production (YoY)			-7.4%
04:30	JPY Capacity Utilization			1%
05:00	SGD Retail Sales (YoY)			-2.2%
05:00	SGD Retail Sales (MoM)			1.9%
05:30	EUR Retail Sales (YoY)			2.8%
06:00	EUR Gross Domestic Product (YoY)			0.8%
06:00	EUR Current Account			€0.5B
06:00	EUR Consumer Price Index (YoY)			0.7%
06:30	INR WPI Inflation			0.16%
07:00	TRY Industrial Production (YoY)			3.4%
08:00	EUR HICP (YoY)		0.5%	0.5%
08:00	EUR HICP (MoM)		0%	0%
08:00	EUR Consumer Price Index (MoM)			0.2%
08:00	EUR Consumer Price Index (YoY)		0.1%	0.4%
08:00	EUR Core Inflation (MoM)		0.2%	-0.1%
08:00	EUR Core Inflation (YoY)		2.7%	2.4%
08:00	EUR Headline Inflation (YoY)		3.0%	2.7%
08:00	EUR Headline Inflation (MoM)		0.2%	-0.1%
09:00	EUR Industrial Orders n.s.a (YoY)			0.3%
09:00	EUR Industrial Sales n.s.a. (YoY)			-1.6%
09:00	EUR Industrial Orders s.a (MoM)			1%
09:00	EUR Industrial Sales s.a. (MoM)			0.2%
09:30	GBP Consumer Inflation Expectations			3.3%
10:30	RUB Interest rate decision		6.25%	6.50%
11:30	INR Trade Deficit - RBI			-45.7B
11:30	INR Balance Payment $			$14B
11:30	INR Current Account Balance $			$-14.3B
11:30	INR FX Reserves, USD			$451.08B
13:30	USD Retail Sales ex Autos (MoM)		0.4%	0.2%
13:30	USD Retail Sales Control Group		0.4%	0.3%
13:30	USD Retail Sales (MoM)		0.4%	0.3%
13:30	USD Export Price Index (YoY)			-2.2%
13:30	USD Import Price Index (MoM)		0.2%	-0.5%
13:30	USD Export Price Index (MoM)		0.1%	-0.1%
13:30	USD Import Price Index (YoY)			-3%
15:00	USD Business Inventories		0.2%	0.0%
15:00	COP Retail Sales (YoY)			6.9%
15:00	COP Industrial output (YoY)			0.3%
18:00	USD Baker Hughes US Oil Rig Count			663
20:30	USD CFTC USD NC Net Positions			$-39K
20:30	USD CFTC Oil NC Net Positions			428K
20:30	USD CFTC Gold NC Net Positions			$290.7K
20:30	GBP CFTC GBP NC Net Positions			£-30.1K
20:30	JPY CFTC JPY NC Net Positions			¥-47.8K
20:30	EUR CFTC EUR NC Net Positions			€-69K
20:30	AUD CFTC AUD NC Net Positions			$-36.4K

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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